Coronavirus: Gold Coast tourism boss Annaliese Battista urges Federal Government to save Virgin Australia
The Aussie carrier teeters on the brink and could be days away from voluntary administration.
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THE Gold Coast’s tourism boss is urging the Federal Government to save Virgin Australia as it teeters on the brink and could be days away from voluntary administration.
Virgin CEO Paul Scurrah’s desperate appeal for a $1.4 billion three-year Federal Government loan appears to have fallen on deaf ears in Canberra.
Yesterday, Treasurer Josh Frydenberg said: “Their first point of call is their equity holders – as you know, not just Virgin globally, but there’s Etihad, there’s Singapore, there’s two China-related companies who are stakeholders.”
However it is understood four of the five major shareholders, including Singapore Airlines which has received its own bailout package, have refused to inject any fresh cash.
That leaves Virgin Australia, which has 5000 staff and is one of Queensland’s biggest employers, with days to come up with a solution to its cash crunch that saw its shares go into a trading halt on Tuesday.
Prior to the virus pandemic shutting down airline travel, 46 per cent of inbound domestic visitors to the Gold Coast arrived on Virgin via both Brisbane and Gold Coast airports. Those visitors pump $1.93 billion into the city’s economy.
Destination Gold Coast CEO Annaliese Battista, in a letter to Federal Government, writes: “The future of Gold Coast’s tourism economy is inextricably linked to the continuity of two viable carriers in the market. Destination Gold Coast therefore urges the Federal Government to ensure Virgin Australia remains viable alongside Qantas.
“Integral to Gold Coast tourism economy’s recovery will be aviation access and affordability. This is particularly true for the Gold Coast given that our core target market, being Australian working families, is highly sensitive to price increases.
“Competition within the domestic fly market is the key mechanism to keep the cost of air travel down. In doing so, more Australians are able to afford to holiday on the Gold Coast.”
Mr Scurrah warned of “catastrophic” outcomes if it collapsed and added it spends $1 billion in the tourism industry supply chain in Queensland. “Some of those suppliers won’t survive this crisis if we don’t,” he said. “The impact not being here would be catastrophic for the Queensland economy.”
Virgin told the ASX on March 13 it “has a cash position in excess of $1 billion, with no significant debt maturities until October 2021 and no new aircraft deliveries until July 2021”.
It is understood Cabinet is split over how – or whether – they should save the airline.
The government wants a viable and competitive sector but some government sources have questioned why Virgin has to be the second domestic player in Australia.
Ms Battista’s letter added that Virgin was also the longest-serving international carrier on the Gold Coast, bringing tens of thousands of visitors to the Coast.
“The competition provided by Virgin Australia in all of the Gold Coast’s key inbound markets has seen increased supply of seats, lower fares and substantial contribution to Gold Coast’s tourism economy for 20 years,” she wrote.
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